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During last week (October 2020), as many parts of the country entered more stringent ‘Tier 2’ and ‘Tier 3’ coronavirus restrictions, the government was under increasing pressure to better support both jobs and businesses. On Thursday, the chancellor Rishi Sunak announced a package of measures under the title ‘Plan for Jobs’.
Essentially, the changes are tweaks to the Job Support Scheme and the Self-Employment Income Support Scheme. Both will receive more generous subsidies. In addition, the chancellor announced extra business grants for firms in some sectors.
So what are the changes, and what do they mean for you? In this post, we cut through the noise to give you the information you need.
Job Support Scheme changes
The original iteration of the Job Support Scheme meant that, if you put an employee on reduced hours, the government would pay for a third of the hours they didn’t work. To qualify, an employee had to work at least a third of their normal hours.
You can find a full explanation of the original scheme here, but to give an example, someone working a third of their normal hours would get 78% of their normal earnings. The employer would pay 55% of the usual wages and the government grant would cover the rest.
Under the revised scheme, the employer contribution will be reduced to 5% and the minimum hours requirement will drop to only 20% of normal. According to a government press release, this means that “if someone was being paid £587 for their unworked hours, the government would be contributing £543 and their employer only £44.”
In a nutshell, the new scheme is more generous. It will still come into force on 1st November.
If a business is made to close because of COVID-19 restrictions, then it is still eligible for the Job Support Scheme (Closed), which remains unchanged.
Full details of the revised JSS can be found here.
‘Plan for Jobs’ and SEISS
The Self-Employed Income Support Scheme has also been beefed up. The second grant of this scheme awarded people 70% of their average monthly profits (subject to a cap). The third grant was set to drop to 20% for the period covering November to January.
The latest announcement means that SEISS will cover 40% of average monthly profits for the period. This also means the maximum grant will rise from £1,875 to £3,750.
Full details of SEISS can be found here.
Additional business grants
The final plank of the ‘Plan for Jobs’ is funding to support businesses adversely impacted by restrictions in high-alert areas. These business grants are largely targeted at the hospitality, leisure and accommodation sectors. Worth up to £2,100 per month, they can be claimed retrospectively by firms that have already been affected by restrictions.
The conditions of the grants depend on variables such as a business’s rateable value and will be allocated by local authorities. To get full details on the scheme, see this Business Grants Factsheet.
As always, if you are THP client and you would like any advice on these ‘Plan for Jobs’ initiatives, please get in touch with your account manager.
About Jon Pryse-Jones
Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.
An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”
Jon’s appreciation for THP extends to his fellow team members and the board. “They really know how to run a successful business,” he says. He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.